Becker's Spine Review

Becker's Spine Review November 2015

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44 HEALTHCARE REFORM Hospitals Turning to Physician Practice Acquisitions for Growth: 5 Key Trends By Laura Dyrda A new Accenture report shows large hospitals and health systems in the United States continue to buy up phy- sician practices and clinics for growth opportunities instead of the traditional method: acquiring other hospitals. e researchers examined 1,500 healthcare provider acquisi- tions between 2006 and 2015. Here are five key notes from the report: 1. In the first five months of 2015, healthcare providers reported a record acquisition volume of $241 billion, according to Accen- ture's estimates. 2. ere is a shi toward vertical and digital acquisitions in healthcare that's gaining momentum. Vertical acquisitions include providers purchasing non-acute-care facilities, including clinics or physician practices. ese acquisitions are expected to reach 84 percent of total provider acquisition volume by 2018 — that's up 74 percent from today. 3. Digital acquisitions, including purchasing companies focused on sensors, mobility, analytics or cloud capabilities, are expected to expand by a multiple of eight. ey are expected to reach 8 percent of the acquisition volume through 2018. 4. e hospital acquiring other hospitals dropped from 32 per- cent in 2006 to 21 percent in 2014. Over the next three years, it's expected to shrink to 6 percent by 2018. 5. e best-prepared executives will likely systematically manage a potential deal as a product of a whole instead of one-off oppor- tunities, according to the report. "To deal effectively with greater complexity, higher volumes and other changes resulting from increased acquisitions, indus- try providers will need to manage their business with the mind- set of a portfolio manager," said Managing Director of Health Provider Consulting at Accenture Kristin Ficery. n

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